Vivendi announces drop in profits

Published:  31 Aug at 9 AM

Vivendi, the French telecoms and media company, has reported a second quarter drop in net profits. The firm has blamed a 46 per cent fall in profits to €619 million on its struggling telecoms division. Revenues are down by 1.5 per cent to €6.96 billion. Because of the trouble it is currently having with its SFR phone unit, the firm said that it aims to reduce costs by around €500 million by the end of 2014.

Philippe Capron, Vivendi’s chief financial officer, said that a price reset in the mobile market in France was causing the company to suffer and that it was important to find ways to adjust to the current situation.

He added that costs would be cut in IT, marketing and procurement and through voluntary redundancies. Capron went on to deny that Vivendi would be looking to sell of some off its businesses in order to keep costs down including Activision Blizzard which is responsible for the computer game World of Warcraft.

Vivendi’s shares this year have dropped to their lowest level in nearly a decade. However, the announcement that the firm intends cutting costs has boosted the price by 3.4 per cent.

In June, a disagreement about how the company should move forward resulted in the resignation of chief executive Jean-Bernard Levy. He was replaced by Jean-Francois Dubos, the company’s head lawyer.